Africa-Press – South-Africa. Kumba Iron Ore says its profit for the six months to end June will drop by up to 22% to about R10 billion.
The Anglo American subsidiary said the decline in profitability is due to lower export prices and lower volumes sold as it could not rail all its production to the port during the period.
“Given the Transnet rail challenges experienced to date in 2023, a portion of the waste stripping at Kapstevel South will be re-phased, resulting in Kolomela’s waste guidance reducing to 45 to 55 million tonnes, from 60 to 70 million tonnes last year,” said Kumba.
Ore railed to the port and to its customers declined 3% to 18.4 million tonnes in the period. Kumba could not send all its stock to its customers as railway operator Transnet struggled with capacity.
Among other incidents that negatively affected Kumba’s business, in June, the 861km Transnet iron ore rail line from the Sishen mine in the Northern Cape to the port of Saldanha Bay on the West Coast was closed for after a 15-wagon train derailment that closed the line for more than a week. This followed a week of derailment caused by cable theft on the same line.
“The benefit of the collaboration between the Ore User’s Forum and Transnet on the maintenance of the iron ore export channel (IOEC) and the locust-spraying programme during the first quarter was offset by derailments resulting in the line being closed for seven days, which coincided with incidents of cable theft experienced in June,” said Kumba.
Due to these rail constraints, total stockpiles remained at 7.9 million tonnes.
Total production volumes increased by 6% to 18.8 million tonnes, from 17.8 million tonnes last year. Kolomela mine’s production jumped 22% to 6 million tonnes. This reflects the benefit of improved ore feedstock availability at the mine. Production at the Sishen mine remained largely unchanged at 12.8 million tonnes.
The Kapstevel South project remained on track to deliver first ore during 2024, said Kumba.
The lower iron ore prices and sales volumes were offset, to a certain extent, by a weaker exchange rate. Kumba said it exported its product at an average of R18/$ during the period. The rand weakened against the dollar from just under R16 last year.
Headline earnings per share will come in at a range of R28.16 to R32.27 per share, down from R36.23 a share, said Kumba.
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